negative demand

« Back to Glossary Index

Negative demand occurs when consumers who dislike a product or service and may often even pay to avoid the product or service.

Below, I have listed a few examples of what negative demand in marketing. However, to fully understand the term negative demand, please read the description below the examples.

Example of negative demand:

For this example, I am going to use the beef industry. A few decades ago, the beef industry was hit with the news of bovine spongiform encephalopathy, or mad cow disease. While this was limited to a specific region of the world, the U.K, the beef industry saw a ripple effect all across the globe. The sales of beef dropped dramatically. As a result of the widespread news about mad cow disease, a negative demand, was created for beef products. Consumers grew to fear and dislike the idea of purchasing beef to consume. Most consumers turned to alternative meat products, such as chicken and fish, which in the latter case, often cost more than beef or chicken.

The beef industry required marketers who could manage this negative demand and begin to create PR campaigns and marketing strategies that could counter the claims that all beef was bad for you. In essence, the marketers in the beef industry needed to change the demand state the beef industry was facing during this international crisis.

See below for a discussion and explanation of the eight different demand states marketers must manage.

Discussion and further understanding of negative demand and the eight demand states

Marketers serve many functions within the marketing department and organization they work for. The marketer must be skilled at creating demand for the products and services they serve. Marketers must influence the level, timing and composition of the demand of their products and services in order to meet their organizations objectives. In essence, the marketer is responsible for demand management. There are eight states of demand that may exist and must potentially be managed by marketers for products and services. To correct the deficiency, the marketer must first identify the main cause of the demand state and then develop a plan of action to shift the demand from the current state to a more desirable demand state.

The eight demand states are:

1. negative demand – as stated above, consumers may dislike a product or service and may pay to avoid it. The marketer must manage this negative demand and work toward changing the consumers perception.

2. Nonexistent demand – Consumers may be unaware of or uninterested in the product or service.

3. Latent demand – Consumers may share a strong need that cannot be satisfied by an existing product.

4. Declining demand – Consumers begin to buy the product less frequently or not at all.

5. Irregular demand – Consumer purchases vary on seasonal, monthly, weekly, daily, or even hourly basis.

6. Full demand – Consumers are adequately buying all products put into the marketplace.

7. Overfull demand – More consumers would like to buy the product than can be satisfied.

8. Unwholesome demand – Consumers may be attracted to products that have undesirable social consequences.


« Back to Glossary Index